The Tanzania Investment Centre (TIC), with technical support from the USAID Hub, recently produced a study that identifies investment opportunities in cashew nut growing and processing in the country.
Tanzania cashew nut production is growing at 450% according to its Cashew Nut Board (CBT), with significant opportunities for investors along the value chain
Cashews are grown in southern Tanzania, mainly in Mtwara, Lindi, Ruvuma, and Pwani, with a total planted area of about 695,683 hectares.
In 2017/2018, the country’s raw cashew nut production reached 387,936 metric tons (MT).
With an additional 461,000 hectares of land in the Lindi, Mtwara, Pwani and Ruvuma regions designated either as industrial parks (green fields) or land for new cashew plantations/farming, this number is set to increase.
Yet, 87.3% of Tanzania’s cashew nut exports remain unprocessed and is mainly exports to India – and more recently Vietnam – that have high processing capacities, and that then export to large markets like the US.
But there are already 29 large and small-scale cashew processors (brownfields) in Tanzania that are seeking joint ventures to expand their businesses.
The study highlights these opportunities along with the following:
1) Adding value to Tanzania’s raw cashew products through processing.
-Processing nuts (kernels) into various products
-Processing cashew apples into juices and liquors
-Squeezing cashew shells into saleable liquids
2) Investing into new cashew farming/plantations and provide extension services so as to increase productivity and total tonnage
-Opening new, large-scale cashew plantations in Tanzania
-Providing agronomic extension services to improve cashew productivity from 0.3 MT/year to 1.0 MT/year
3) Investing in cashew machinery, equipment, spare parts production and supply
-Local manufacturing of machinery or equipment to process nuts, cashew apples and cashew shells
-Manufacturing of spare parts.
To build on these opportunities, the Government of Tanzania (Got) is planning an Investors’ Forum on July 5-6, 2019.
However, several controversies affect the cashews sector, especially in relation to the 2018 harvest when Tanzania’s President John Magufuli intervened in trying to sustain the crop’s collapsing price.
The President set the price at a minimum buying price of TZS 3,000 a kilo in late October 2018, up from the TZS 1,550 recommended by the CBT.
But, while traders had paid up to TZS 4,000 a kilo for the 2017 crop, in 2018 they were willing to pay no more than TZS 1,700 a kilo of the nuts.
President Magufuli further intervened in November 2018 directing that the GoT would purchase all cashew nuts from farmers at TZS 3,300 per kilo, through the Tanzania Agricultural Development Bank (TADB).
The GoT has since purchased a total of TZS 722.7 billion in cashew nuts from farmers, of which TZS 623.6 billion have been paid.
On 20th May 2019, the Minister for Agriculture of Tanzania, Mr. Japhet Hasunga, announced that the government would complete paying all cashew nut farmers within the next two weeks.